It may seem unbelievable, but it is actually true: Romania's monetary market has blossomed into one of the most attractive such markets across Europe, in the eyes of the investment banks. This does sound great, but not to the National Bank of Romania.

High interest rates for T-bills and ROL-denominated deposits, accompanied by stabilisation of the exchange rate, have determined financial groups such as Deutsche Bank, JP Morgan, Credit Suisse First Boston and Lehman Brothers to look for ways to invest on the Romanian market, banking sector sources say.

Consequently, many of the world's top ten banks have established so-called Special Purpose Vehicles (SPV), namely financial vehicles exclusively aimed at Romania's monetary market, the quoted sources say.

The banks have been or are using these SPVs (in fact limited liability companies) to invest significant amounts of money (a total of hundreds of millions of dollars, according to banking sources) in T-bills or deposits.

This is about the famous "hot money" that is suddenly attracted to certain markets by favourable circumstances.

And in Romania circumstances are more than just favourable: rates for ROL deposits and for T-bills revolve around 16-18 percent, whereas the ROL/EUR exchange rate has barely budged since the beginning of the year. Practically, annual yields of 16% for euros can be obtained in Romania, whereas rates for euro-denominated deposits amount to 2% in the West.

The signals regarding the interest of foreign banks in the Romanian market appeared as early as last year, when German group DePfa established in Romania a company managing an investment fund, which it used to invest some 70 million dollars in T-bills.

However, DePfa is the only bank that decided to invest through a fund, with the rest of the players